AN EVALUATION OF FACTORS AFFECTING ENTREPRENEURSHIP …

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AN EVALUATION OF FACTORS AFFECTING ENTREPRENEURSHIP

SKILLS OF SMALL SCALE FARMERS: A CASE STUDY OF

KANAKANTAPA FARMING AREA.

By

HAZVENEYI MAREBESA

A Dissertation Report Submitted in Partial Fulfillment of the

Requirements for the Award of Bachelor of Development Studies Degree of

the Cavendish University Zambia

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DECLARATION

I Hazveneyi Marebesa declare that the work in this thesis was carried out in accordance with

the regulations of the Cavendish University Zambia and is original except where indicated by

specific reference in the text. No part of the thesis has been submitted as part of any other

academic award. The thesis has not been presented to any other education institution. Any

views expressed in the thesis are those of the author and in no way represent those of the

School.

Signature……………………………………………

Date………………………………

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ACKNOWLEDGEMENTS

First of all, I would like to thank God and express my sincere gratitude to all people, who

supported me during the preparation of the study journey. I wish to acknowledge the

tremendous efforts of my supervisor Mr. Hapompwe, for his timeless effort in guiding me to

come up with this project report and make this work a success. My gratitude go to Cavendish

University Zambia for having given me a chance and a conducive environment to undertake

my studies, my gratitude also goes to all the university lecturers who thought me in various

courses while undertaking my Bachelors program in Development Studies.

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DEDICATION

I dedicate this work to my dear mother Daphine Adams for her unwavering financial and

moral support that has brought me this far. May the Almighty God bless you. I sincerely

thank you for your guidance and support

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TABLE OF CONTENTS

DECLARATION.................................................................................................................................... i

ACKNOWLEDGEMENTS ................................................................................................................ iii

DEDICATION...................................................................................................................................... iii

LIST OF TABLES ............................................................................................................................. viii

LIST OF FIGURES ............................................................................................................................. ix

LIST OF ACRONYMS AND ABBREVIATIONS ............................................................................ x

OPERATIONAL DEFINITION OF TERMS ................................................................................... xi

ABSTRACT ......................................................................................................................................... 12

1.0 CHAPTER ONE: INTRODUCTION ......................................................................................... 13

1.1 Introduction ..................................................................................................................................... 13

1.2 Background to the study ................................................................................................................. 14

1.3 Problem statement ........................................................................................................................... 15

1.4 Objectives of study ......................................................................................................................... 16

1.4.1 General objective of study ........................................................................................................... 16

1.4.2 Specific Objectives of Study ........................................................................................................ 16

1.5 Research Question .......................................................................................................................... 17

1.6 Significance and Justification of the Study ..................................................................................... 17

1.7 Limitations ...................................................................................................................................... 17

1.8. Scope of the Study ......................................................................................................................... 17

2.0 CHAPTER TWO: LITERATURE REVIEW ............................................................................ 19

2.1 Introduction ..................................................................................................................................... 19

2.2 Operational Definitions ................................................................................................................... 19

2.2.1 Entrepreneurship .......................................................................................................................... 19

2.2.2 Entrepreneurship Skills in the Farming Business ........................................................................ 20

2.3. Theoretical Framework .................................................................................................................. 21

2.4 Previous studies .............................................................................................................................. 23

2.4.1 Educational training and Information .......................................................................................... 23

2.4.2 Access to credit and Financial Literacy ....................................................................................... 23

2.4.3 Access to Markets ........................................................................................................................ 24

2.5. Research Variables arising from Literature Review ...................................................................... 24

2.5.1 Challenges in Acquiring Entrepreneurship Skills by Small Scale Farmers ................................. 24

2.5.2 Successful Farm Entrepreneurship Development ........................................................................ 26

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2.6 Conceptual Framework ................................................................................................................... 28

Figure 2.1: Conceptual Framework ...................................................................................................... 28

2.7 Conclusion ...................................................................................................................................... 28

3.0 CHAPTER THREE: METHODOLOGY AND DESIGN ......................................................... 29

3.1 Introduction ..................................................................................................................................... 29

3.2. Research design ............................................................................................................................. 30

3.3. Population of study ........................................................................................................................ 30

3.4 Sample size ..................................................................................................................................... 30

3.5 Sampling Design ............................................................................................................................. 31

3.6. Research Instruments ..................................................................................................................... 31

3.7 Validity and Reliability of Research Instruments ........................................................................... 32

3.8 Response Rate ................................................................................................................................. 32

3.9 Data Analysis .................................................................................................................................. 33

3.10 Ethical Considerations .................................................................................................................. 33

4.0 CHAPTER FOUR- DATA PRESENTATION AND ANALYSIS ............................................ 34

4.0 Introduction ..................................................................................................................................... 34

4.1 Demographics Data Analysis .......................................................................................................... 34

Table 4.1: Demographics summary Statistics ....................................................................................... 34

4.1.1 Gender .......................................................................................................................................... 35

Table 4.2. Respondents Gender frequency distribution ........................................................................ 35

Figure 4.1. Respondents Gender Histogram ......................................................................................... 36

4.1.2 Age ............................................................................................................................................... 37

Table 4.3. Respondents Age frequency distribution ............................................................................. 37

Figure 4.2. Respondents Age frequency distribution ............................................................................ 38

Figure 4.3. Respondents Age Pie Chart ................................................................................................ 39

4.1.3 Farm Size ..................................................................................................................................... 40

Table 4.4. Respondents Farm Size frequency distribution ................................................................... 40

4.1.4 Full Time or Part Time Farmer .................................................................................................... 40

Table 4.5. Respondents Full Time or Part Time Farmer Histogram ..................................................... 40

Figure 4.4. Respondents Full Time or Part Time Farmer Histogram ................................................... 41

4.1.5 Demographic Data Correlation Analysis ..................................................................................... 42

Table 4. 6: Pearson Correlation Analysis .............................................................................................. 42

4.2 Factors that hinders development of entrepreneurship skills among small scale farmers .............. 42

Table 4.7: Education, Training and Entrepreneurship Skills Descriptive Statistics ............................. 42

Table 4.8: Financial Literacy Descriptive Statistics ............................................................................. 43

4.3 Factors affecting entrepreneurship skills ........................................................................................ 44

Table 4.9: Education, Training and Entrepreneurship Skills Frequency Distributions ........................ 45

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Table 4.10: Financial Literacy Frequency Distributions ....................................................................... 48

5.0 CHAPTER FIVE: INTERPRETATION & DISCUSSION OF FINDINGS ........................... 50

5.1 Introduction ..................................................................................................................................... 50

5.2 Factors That Hinders Development of Entrepreneurship Skills among Small Scale Farmers ........ 50

5.3 Extent to which the factors affecting entrepreneurship skills have contributed to the stagnation of

small scale farmers ................................................................................................................................ 51

5.4 Effectiveness of the Measures Taken To Develop Entrepreneurship Skills among Small Scale

Farmers ................................................................................................................................................. 52

6.0 CHAPTER SIX- CONCLUSIONS AND RECOMMENDATIONS ........................................ 54

6.1 Introduction ..................................................................................................................................... 54

6.2 Conclusions ..................................................................................................................................... 54

6.3 Recommendations ........................................................................................................................... 55

REFERENCES .................................................................................................................................... 56

APPENDIX I: QUESTIONNAIRE ........................................................ Error! Bookmark not defined.

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LIST OF TABLES

Table 4.1: Demographics summary Statistics .......................... Error! Bookmark not defined.

Table 4. 2: Pearson Correlation Analysis ................................................................................ 32

Table 4.3: Education, Training and Entrepreneurship Skills Descriptive Statistics ................ 42

Table 4.4: Education, Training and Entrepreneurship Skills Frequency Distributions ........... 45

Table 4.5: Financial Literacy Descriptive Statistics ................................................................ 43

Table 4.6: Financial Literacy Frequency Distributions ........................................................... 48

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LIST OF FIGURES

Figure 2.1: Conceptual Framework ......................................................................................... 19

Figure 4.1. Respondents Gender frequency distribution ......................................................... 26

Figure 4.2. Respondents Gender Histogram ............................................................................ 26

Figure 4.3. Respondents Age frequency distribution............................................................... 27

Figure 4.4. Respondents Age Pie Chart ................................................................................... 29

Figure 4.5. Respondents Farm Size frequency distribution ..................................................... 30

Figure 4.6. Respondents Full Time or Part Time Farmer Histogram ...................................... 31

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LIST OF ACRONYMS AND ABBREVIATIONS

SPSS Statistical Package for Social Science

SME Small and Medium Enterprises

SMME Micro and Medium Enterprise

NGO Non-Governmental Organization

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OPERATIONAL DEFINITION OF TERMS

Entrepreneurship: The definition of entrepreneurs by Ahmad and Hoffman (2008)

is adjusted for the purpose of this study to define small scale

farming entrepreneurs as those individuals with a potential to

generate value, through the creation, expansion or innovation of

economic activity by identification and exploitation of new

agricultural products, agro-processes or markets.

Entrepreneurship Skills: In Entrepreneurial skill can be defined as the ability to create

something new with value by devoting the necessary time and

effort, assuming the accompanying financial, psychic and social

risks, and receiving the resulting rewards of monetary and

personal satisfaction and independence (Hisrich & Peters, 2002).

Farming: Farming is a great way to describe the lifestyle and work of

people whose jobs are in the agriculture industry. People often

have a romantic idea of what farming is like roosters crowing,

farmers driving tractors and milking goats although farming can

be very hard work, dependent on food prices and weather.

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ABSTRACT

Small Scale Farming business in Zambian’s agricultural sector has not performed

well enough to play their expected vital role in the economic growth and development of

the country. This situation has been of great concern to the government, citizenry, sector

operators, practitioners and the organised private sector groups.

The purpose of this study was to evaluate the factors which influence performance of Small Scale

Farmers in Kanakantapa Farming Area. The study had the following objectives: To identify the

factors that hinders development of entrepreneurship skills among small scale farmers. To examine

the extent to which the factors affecting entrepreneurship skills have contributed to the stagnation

of small scale farmers in Kanakantapa Farming Area of Zambia. To establish the effectiveness of

the measures taken to develop entrepreneurship skills among small scale farmers. The study

employed descriptive and explanatory survey research design to evaluate the factors which

influence performance of Small Scale Farmers in Kanakantapa Farming Area. The sample size

consisted of 67 Small scale farmers obtained from a total population

of 500 Small scale farmers. The respondents were selected through simple random sampling

techniques. The research instruments used were questionnaires and interview schedules. The

results were interpreted and placed on frequency distribution tables in percentages that display

systematically the results and give meaning of reported figures; these were used to provide an

adequate statistical report to the findings. The last section of the report contains a summary of

findings of the study as well as discussions and conclusions based on the findings.

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1.0 CHAPTER ONE: INTRODUCTION

1.1 Introduction

The term entrepreneurship is used to describe a dynamic process of creating incremental wealth

(Shailesh et al., 2013). This wealth is created by individuals who take the major risks in

terms of equity, time and career commitment of providing value to some product or services,

the product or service itself may or may not be new or unique but value must somehow be infused

by the entrepreneur by securing and allocating the necessary skill and resources. In other words

entrepreneurship is the application of energy for initiating and building an enterprise (Mishra

et al., 2010). Presently, in Nigeria an entrepreneur is an innovator who recognizes and seizes

opportunities, converts those opportunities into workable ideas, adds value, effort, money,

skill and assumes risks of competition to actualize the ideas and takes the reward.

Entrepreneurship is associated with innovative and dynamic developments within the Small,

Micro and Medium Enterprise (SMME) sector (United State Department of Agriculture, 2011).

Therefore, entrepreneurship is a charismatic concept, widely used and widely defined; for

example, as a creative and innovative response to the environment (Chandramouli et al., 2007).

Onubuogu and Esiobu (2014) opined that sustainable development of agribusiness requires

the development of entrepreneurial and organizational competency in farmers. Developing

entrepreneurial skills of farmers can take two tracks. The first is to amend the social, economic,

political, and cultural frameworks that hinders, and foster those that stimulate their development.

The second is encouragement of farmers, via their personalities and capabilities, to kindle the

development of entrepreneurship. If farming competitiveness is to be improved by nurturing

entrepreneurial behaviour, both tracks have to be considered. The improvement of

entrepreneurial skills in agriculture is an important condition to generate sustainable rural

development (de Wolf and Schoorlemmer, 2007). If entrepreneurship is an instrument for

improving the quality of life for families and communities, and for sustaining a fit economy

and environment, fostering entrepreneurship skill must be regarded as an urgently needed

development component (Chandramouli et al., 2007). Though government development

programmes are put in place to promote entrepreneurship, most agribusinesses are still

encountering challenges that stagnates entrepreneurial activities

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1.2 Background to the study

Entrepreneurship is known as self-acknowledged conviction by a person that they intend to set up

a new business venture and consciously do so at some point in future (Kuckertz and Wagner, 2010;

Thompson, 2009). Entrepreneurship is about initiating and creating innovative entities that create

wealth. It involves starting or creating a new venture, innovating or putting together new

combinations of resources, relentlessly pursuing opportunities, acquiring resources, taking

calculated risks, ensuring profit seeking and crafting value (Kuratko, Morris and Covin, 2011).

This study therefore intends to assess the entrepreneurship skills of small scale farmers.

Entrepreneurs mobilize resources for exploitation of the opportunity recognized. Schumpeter

(1942) describes entrepreneurs as bearers of risk, people that bring together factors of production

or organizers of innovation. Entrepreneurs create value where there was none before by using

resources in an innovative and unique way (Kuratko, Morris & Covin, 2011).

Hussain et al and Mukoki congruently identified several constraining factors in small scale

agriculture. Among others, inability to convert resources such as latest technology in farming,

information from agricultural research centers, cross-breeding strategies and water management

skills to profitable production has been one a challenge hindering probable rural development

through farming. An alternative way to approach entrepreneurship on farms would be is to put

emphasis on the value adding activities such as processing food or direct sales and developing

niche products. Unlike the mere scale enlargement in bulk production the value adding activities

are tailor made for changing position of the farm in relation to the commodity chains and the

process in which the value is generated. In many countries, regions and sectors, the value adding

activities have not been conventional on the farms. Therefore, in respect to this, they can be viewed

as innovations. Therefore, if one accepts innovation as the key element in entrepreneurship, it

seems feasible to associate entrepreneurship on farms especially with the value adding activities

(Knudson etal , 2004)

The small scale farming subsector is now seen as a critical player in rural development drive. There

have been considerable differences in the economic performances of farmers and this can be

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attributed to huge differences associated with the entrepreneurship skills of the farmers. Farming

is one of the main economic activities in the rural areas of Zambia in Kanakantapa farming area,

for instance, farmers, all year round, are engaged in agriculture related activities.

If the country is to make agriculture the economic mainstay, there is need to alleviate challenges

faced by small scale farmers by providing them with the necessary agricultural inputs as well as

incentives to do with entrepreneurship. The primary production on the farms has been largely

invisible. In recent years, studies have been published on farming businesses focusing specifically

on the business diversification of farms. In most of these studies, the view on entrepreneurship is

explicitly stated and utilized (Carter, 2003).

Successful entrepreneurship requires the farmer to possess a vision for growth, good interpersonal

skills, strong marketing strategies, sound management skills and sharp cost-benefit consciousness.

In the studying of entrepreneurship, it must be stated that farming has not been a popular context

for studying entrepreneurship until recently; some studies have dealt with entrepreneurship in the

business activities related to processing and marketing of farm products (Barth 2000). The

researcher will therefore endeavor to assess the entrepreneurship skills among small scale farmers;

this will as a result create a better perspective on how these farmers can better their market sales

and contribute to the overall economic growth of the country.

1.3 Problem statement

Recently, there has been an increase in farming activities mostly among small scale farmers, but

despite this growth, small scale farmers are not able to participate in long term commercial

contracts (Freguin-Gresh et al., 2012; Jagwe and Machethe, 2011; Jari and Fraser, 2009; Louw et

al., 2008; Randela et al., 2008; Shiimi et al., 2012; World Bank Report, 2013). Farmers in

developing countries such as Zambia lack a lot of incentives that can enable them attain better

entrepreneurship skills. Farmers in Kanakantapa Farming Area have availability of arable land for

agriculture but still lack the ability to have great profit margins and sales out of their agriculture

produce.

Undeniably, much ground has been covered in order to lessen farming constraints mainly in rural

areas. While most farmers have received government support to transform the rural agriculture

gamut, entrepreneurial skills associated with running productive farming are scarce among the

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small-scale farmers. This problem can therefore be attributed to the lack of sensitization in the area

of entrepreneurship, lack of market information, inadequate experience on grades and standards,

insufficient and inadequate contractual agreements. The challenge of poor road network has been

a great concern among Farmers as they are disadvantaged when it comes to the transportation of

crops to the markets thereby affecting the market participation of farmers.

Markets are critical for sustainability and profitability of smallholder farmers because they act as

a medium of exchange. Market participation by smallholder farming entrepreneurs is critical

because they derive a livelihood, income and opportunities for exploitation. Marketing activities

such as cleaning, grading, storage, transportation and selling has the potential to increase

profitability and sustainability of smallholder farmers (Jari and Fraser, 2009). At regional,

provincial and national level, market participation by smallholder farming entrepreneurs is critical

for sustainable agriculture and economic growth (World Bank Report, 2013).

Smallholder farming entrepreneurs have to decide where to sell their produce to maximize profit.

When making a decision on where to sell, the smallholder farming entrepreneur is influenced by

factors such as transport cost to the market, volume and quality of products to be sold, anticipated

price, certainty of clinching a deal, payments terms, storage capacity in case products are not sold

and type of products (Jagwe and Machethe, 2011; Louw et al., 2013; Makhura, 2001; Ortmann

and King, 2010). All of which have a direct bearing on transaction costs smallholder farming

entrepreneurs face.

1.4 Objectives of study

1.4.1 General objective of study

To assess the factors affecting entrepreneurship skills of small scale farmers in Kanakantapa

Farming Area of Zambia.

1.4.2 Specific Objectives of Study

1. To identify the factors that hinders development of entrepreneurship skills among small

scale farmers

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2. To examine the extent to which the factors affecting entrepreneurship skills have

contributed to the stagnation of small scale farmers in Kanakantapa Farming Area of

Zambia

3. To establish the effectiveness of the measures taken to develop entrepreneurship skills

among small scale farmers

1.5 Research Question

1. What factors hinders development of entrepreneurship skills among small scale farmers?

2. To what extent has the factors affecting entrepreneurship skills have contributed to the

stagnation of small scale farmers in Kanakantapa Farming Area of Zambia?

3. How effective have been the measures taken to develop entrepreneurship skills among

small scale farmers?

1.6 Significance and Justification of the Study

Entrepreneurship skills are a crucial dynamic force in the development of small scale farming

business. The relevance of entrepreneurial skills in farming is associated with the aim of survival

of farms. Thus, it is pragmatic to develop the essence of entrepreneurship skills among small scale

farmers in the society. In social sciences skills, it has been common to approach farming as those

who do not conform to the image of market driven profit making enterprise. Farmers are said to

have been detached from the market logic and are therefore viewed as peasants rather than

enterprise (Ploeg, 2003). Further, it has been claimed that the self-identity of the farmers is

persistently based on their role as a producers than their role as an entrepreneur. Thus, a study on

the assessment of the entrepreneurship skills of small scale farmers is of prime importance to the

study.

1.7 Limitations

The study was constrained by several factors. The study focused on farmers concentrated in the

Kanakantapa resettlement area. The time availed was not enough to collect data from all the

respondents. Most farmers were not literate enough to be able to read and answer the questionnaire.

It was difficult to convince respondents that the questionnaire was solely for academic purposes.

Most of the respondents’ had either wrong or outdated email addresses. However, these limitations

didn’t have any significant interference with outcome of this study.

1.8. Scope of the Study

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The study will be carried out in Kanakantapa Farming Area. Kanakantapa Farming Area is located

in Chongwe district in the region of the Lusaka province in Zambia. The area has got great

agriculture potential, the area mainly consists of small scale farmers whose main livelihood is

agriculture. The study will concentrate on small holder farmers of maize production in total

exclusion of commercial farmers. In this case, the researcher will cover farmers specifically in H

village, J village and K village in Kanakantapa. This was based on the fact that the researcher was

conducting the research simultaneously with his studies, and therefore (as he strived to balance the

research and other academic programs of his study) it was difficult and partly it resulted onto create

of some biasness. This mostly happened, because the researcher at various occasions was

sometimes forced to rush in order to meet the dissertation submission deadlines and other deadlines

of his academic programs

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2.0 CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This Chapter highlights the definition of entrepreneurship. It further highlights the studies that

have been done in relation to the researcher’s topic focusing mostly on the relevant fields of the

researcher’s study being entrepreneurship skills in farming business, challenges of acquiring

entrepreneurship skills by small scale farmers and successful farm entrepreneurship development.

Lastly, it highlights the theoretical models that can be used to explain entrepreneurship skills.

2.2 Operational Definitions

2.2.1 Entrepreneurship

The definition of entrepreneurs by Ahmad and Hoffman (2008) is adjusted for the purpose of this

study to define small scale farming entrepreneurs as those individuals with a potential to generate

value, through the creation, expansion or innovation of economic activity by identification and

exploitation of new agricultural products, agro-processes or markets. Other scholars such a

Kuckertz and Wagner (2010) have viewed entrepreneurship as a catalyst for innovation and

economic development. The ability to innovate continually has become a source of competitive

advantage (Kuratko, 2009). Entrepreneurs have existed for many years. Individuals have,

throughout history, spotted an opportunity and set-up a business to exploit this opportunity while

bearing calculated and minimal risk (Venter et al., 2008). Entrepreneurs mobilize resources for

exploitation of the opportunity recognized. Schumpeter (1942) describes entrepreneurs as bearers

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of risk, people that bring together factors of production or organisers of innovation. Entrepreneurs

create value where there was none before by using resources in an innovative and unique way

(Kuratko, Morris & Covin, 2011).

Although there is no universally accepted definition for entrepreneurship (Kuratko and Hodgetts,

1992; Kuratko et al., 2011), various researchers have attempted to articulate definition of the

concept. Entrepreneurship relates to the functional role of entrepreneurs that encompass functions

like coordination, innovation, uncertainty bearing, capital supply, decision-making, ownership and

resource allocation (Barreto, 1989).

2.2.2 Entrepreneurship Skills in the Farming Business

A study done on small holder farmers in South Africa by Tindisa (2014) empirically tested the

relationships between participation in agro-processing activities by smallholder farming

entrepreneurs and human capital, social capital and market access and the degree to which each

was moderated by the transaction cost. The study tested the relationship between participation in

agro-processing activities, all variables jointly and cumulatively. Structured questionnaires were

administered during smallholder farmer meetings in three provinces namely, Western Cape,

Limpopo and Gauteng. A hierarchical multi-regression analysis was used as the main statistical

tool to test hypotheses.

The main findings of the study were that the relationship between human capital and participation

in agro-processing activities by smallholder farming entrepreneurs is positive and significant.

Similarly, the relationship between social capital and participation in agro-processing activities is

positive and significant. However, the relationship between market access and participation in

agro-processing activities was negative and significant. Finally, transaction cost had an enhancing

moderating effect on the relationship between market access and participation in agro-processing.

The findings further suggested that human capital is fundamental to sustainable development

considering participation in agro-processing activities. Social capital of smallholder farming

entrepreneurs may be enhanced through mentorships and partnerships with neighboring

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commercial farmers and agro-processors. Lower transaction costs were likely to enhance market

access by smallholder farmer’s activities by smallholder farming entrepreneurs.

2.3. Theoretical Framework

The discovery theory stresses the importance of exogenous variables in opportunity recognition.

Discovery theory posits that entrepreneurs are fundamental to search and sourcing opportunities

in the environment. Through searching, entrepreneurs discover opportunities for supply of new

products, new services, and new systems (Alvarez and Barney, 2007; Shane 2000).

The creation theory states that opportunities are endogenously created by deeds and actions of

entrepreneurs through exploration of channels geared for producing new products, new services

and new systems. Creation theory assumes actions of entrepreneurs are fundamental to opportunity

discovery and recognition (Baker and Nelson, 2005).

Another theory is that of the schema theory which explains how entrepreneurs identify

opportunities. Schemas are defined as knowledge or cognitive ability structures representing

content and organization of knowledge that develop as a result of cumulative experience, learning

and meanings that an individual encounters within a specific domain (Gaglio and Katz, 2001;

Ucbasaran, Westhead and Wright, 2009). Schemas determine how individuals respond to new set

of information as a result of disequilibrium in the market, including alertness and ability to search

for such information (Shane, 2000; Shockley and Frank, 2011). Schemas are prone to over-

confidence and familiarity bias that has the potential to hinder creativity and innovation.

Furthermore, the human capital theory postulates that knowledge enhances individuals with

increases in their cognitive ability resulting in the likelihood of more productive entrepreneurial

activity (Davidsson and Honig, 2003; Venter et al., 2008). It assumes that individuals are bound

to maximize economic benefits that accrue from their human capital. Individuals with broader

pools of human capital may be associated with increased levels of productivity. Taylor and Thorpe

(2004) broadened the concept of human capital to include individuals’ cognitive characteristics as

well as accumulated work that has potential to impact on productivity. Knowledge and skills

emanate from human capital investment, including education and work experience, which provides

individuals with increases in cognitive abilities (Becker, 1964). Human capital is defined as a set

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of skills and knowledge that an individual acquires through investment in schooling, on the job

training, and other types of experience (Unger et al, 2011).

Human capital is not only a result of formal education but also experience and knowledge. There

is a positive relationship between human capital and success. Knowledge can be described as either

tacit or explicit (Venter et al., 2008). Tacit-knowledge refers to know-how, which is taken as the

non-codified components of activity while explicit knowledge refers to know-what describing

information conveyed in procedures, processes, formal written documents and educational

institutions (Davidsson and Honig, 2003). Solving complex agricultural problems and deciding on

whether to participate or not participate in agro-processing activities requires both sets of tacit and

explicit knowledge.

Explicit knowledge may be increased through accumulation of formal education such as attending

and graduating at colleges or universities and also through work experience and non-formal

education (Davidsson and Honig, 2003).

Shane (2000) recognizes and identifies the critical imperative of explicit learning towards the

establishment of business. Information and skills required for the exploitation of entrepreneurial

opportunities can be learned through observation of others. Linkage of smallholder farming

entrepreneurs with established commercial farmers is critical for learning and sharing information.

Three dimensions of prior knowledge are critical to the process of entrepreneurial opportunity

discovery and these being prior knowledge of markets, Prior knowledge of ways to serve markets

and prior knowledge of customer problems. Knowledge is not only about formal education. Human

capital encompasses both innate and acquired skills through formal and non-formal education

(Maman, 2000). Human capital is not only a consequence of formal education but also prior work

experience including on-the-job, hands-on practical learning as well as non-formal education such

as training courses that may not be part of the formal education process (Venter et al., 2008).

Entrepreneurial intentions including opportunity recognition was shown to be significantly

constrained by lack of knowledge, inspiration and resources (Mosey, Noke and Binks, 2012).

Social set-up and systems within which an individual operates has the potential to influence over-

or under-investment in education. Furthermore, the magnitude of investment in human capital may

influence attitude towards entrepreneurial activity resulting in individuals that are highly

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certificated discouraged to take risks while under investment in human capital may encourage risk

taking (Davidsson and Honig, 2003). Opportunity recognition is likely to be heightened when

several factors combine and come into effect. These factors may include prior knowledge,

experience and education levels of the entrepreneur but also social networks considering both weak

and strong ties (Shane and Venkataraman, 2000; Sherperd and DeTienne, 2005).

Factors that may influence the process of opportunity recognition and development leading to

recognition and exploitation of opportunities include entrepreneurial alertness, prior knowledge

and experience, social networks, personality traits and type of opportunity. The ability by

smallholder farming entrepreneurs to discover, recognize and exploit agro-processing

opportunities is preceded by entrepreneurial alertness and prior relevant knowledge and

experience. Thus, human capital aspect in understanding and explaining entrepreneurship skills

(ibid, 2005).

2.4 Previous studies

2.4.1 Educational training and Information

Formal education, formal training and non-formal training programs are the major ways of

capacity building. Orienting farmers to thinking and acting in an entrepreneurship perspective

focuses on formal training and non-formal capacity building (McElwee & Bosworth, 2010). For

purposeful development of a farmer’s capacity, formal training designed after a need analysis is

most suitable. In this way, new thinking and positive attitudes towards further agricultural

development are imparted. The intended outcome should be change in knowledge and behavior

that should enable farmers not only increase productivity but engage in practices that lead to

livelihood diversification. While farmer training has been done by many organizations including

universities, it is noted that most do not go beyond disseminating agronomic and managerial

practices.

2.4.2 Access to credit and Financial Literacy

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Financial education programs teach the knowledge, skills and attitudes required to adopt good

management practices for earning, spending, saving, borrowing and investing. Participants in these

programs become equipped with information and tools to make better financial choices, work

towards their financial goals and ultimately enhance their economic well-being. (Henry ,2006),

Considering limited savings/ retained earnings by agricultural MSEs, their lack of collateral and

minimum balance requirements by commercial banks, there is very limited interaction between

the two (MSEs and established financial institutions) - Attempts to link them through micro-

finance institutions and other potential intermediaries are hampered by the regulatory environment

existing within the financial sector. The result is limited financial leveraging (Kimuyu and Omiti,

2000).

Small scale Agricultural financing remains one of the critical enablers to facilitate within sector

growth commensurate with achieving poverty reduction, food, and nutrition security, and

employment creation through Small and Medium Enterprises (SME’s). Yet access to agricultural

financing, let alone commercial cash loans to the sector, remains poor in most developing

countries. It is estimated that globally, only 1% of loans from commercial sources go to the

agricultural sector. This is at variance with agriculture’s importance in economic growth. Inherent

risks contribute to this situation, with agriculture prone to production and marketing risks (FAO

2000.)

2.4.3 Access to Markets

Markets are critical for sustainability and profitability of smallholder farmers because they act as

a medium of exchange. Market participation by smallholder farming entrepreneurs is critical

because they derive a livelihood, income and opportunities for exploitation (Makhura, 2001).

Marketing activities such as cleaning, grading, storage, transportation and selling has the potential

to increase profitability and sustainability of smallholder farmers (Jari and Fraser, 2009). At

regional, provincial and national level, market participation by smallholder farming entrepreneurs

is critical for sustainable agriculture and economic growth (World Bank Report, 2013)

2.5. Research Variables arising from Literature Review

2.5.1 Challenges in Acquiring Entrepreneurship Skills by Small Scale Farmers

25

A study in this area was conducted in Ghana by Becx et al. (2010) and it identified constraints for

entrepreneurship of smallholder farmers to be as follows Mindset of farmers limits entrepreneurial

activity, due to a perceived lack of credit facilities, lack of access to markets, inadequate and

inefficient government support systems; Lack of incentives to invest in farming production

technology as a result of unfavorable input and output prices and poor infrastructure; and

Inordinate risks and uncertainties that smallholder farmers face due to unpredictable climate,

hostile corporate institutions and unreliable markets. Improving the level of skills and knowledge

of smallholder farming entrepreneurship is critical towards increasing agricultural production

(Ashby et 32 al., 2009). Skills improvement should be coupled with improvements in rural

infrastructure including access to credit and markets (World Bank Report, 2013).

A study carried out in Kenya by Ntale Et al (2015) that investigated the factors that affect agro-

entrepreneurship on small farms in Kenya and attempted to develop an agro entrepreneurship

readiness model informed by theoretical and empirical evidence. The study used a cross-sectional

survey research design and a multi-stage sampling technique to identify the 15 locations from the

study area of Kiambu and Murang’a counties where the samples were drawn from. Line transect

sampling technique was employed to pick the 388 farms. Qualitative and quantitative descriptions

were used to measure the extent of agro entrepreneurship among the small farms, while correlation

analysis was used to estimate the association of readiness factors with agro-entrepreneurship on

the small farms. The study revealed that Kenya’s agrarian economy is suffering from limited agro-

entrepreneurship as the statistics show that only 6% of small farmers were adding value to their

agricultural produce. It was discovered that farm sizes are negatively correlated with agro

entrepreneurship. The study showed that the further the farmers are from the local markets, the

more likely they are to add value to their primary agricultural produce. Loan accessibility is highly

correlated with value addition among the small scale farmers. Agro-entrepreneurship readiness

model is rooted in personal & social factors, work experience, cultural, and economic environment

of the small farmers. It was recommended that policy makers therefore, should come up with

incentive to motivate small farmers in practicing agro-entrepreneurship

Another study carried out South Africa by Muzekenyi Et al (2019) reviewed agronomic

entrepreneurial constrictions faced by small-scale farmers in South Africa. Agronomic constraints

that included lack of access to credit, strenuous climate change, and lack of irrigation water among

26

others were discovered. Water constraints was however, regarded as a major constraint in rural

areas and empirical studies showed that the impacts can be very severe. Empirical interaction on

a variety of constraints in rural agriculture revealed generalized evidence which, however, created

loopholes in order to quantify the gist of the matter. Thus, the premise of the study was to clearly

single out entrepreneurial constraints faced by small-scale farmers.

2.5.2 Successful Farm Entrepreneurship Development

A study that explores entrepreneurship development in agriculture among small-scale farmers in

Taraba State was carried out by Pev and Yaro (2017) with a focus on bridging the gap of deep

dearth in research, knowledge and literature on agribusiness development in the North Eastern part

of Nigeria. One hundred and fifty agribusiness entrepreneurs were selected using multi-stage

random sampling technique. Data was collected from respondents using a validated and tested

structured interview schedule with a reliability coefficient of 0.78 based on Cronbach Alpha

formula. Four research questions guided the study. Data collected were analyzed using

descriptive statistical tools and measure of central tendency. Result of the analysis revealed

that personal intension, need for autonomy and displacement as well as disruption in life

constitute the key drive to entrepreneurship development in the study area.

Furthermore, Agribusiness Entrepreneurship enterprises have been invaluable to small scale

farmers in the state. However, the Study identified poor access to entrepreneurship information,

inadequate start-up capital and reoccurrence of ethno religious violence in many parts of the

state as major impediment to entrepreneurship development in Agriculture in the area.

Despite this shortcomings small scale farmers perceived their extent of entrepreneurship

drive and participation to be high (x=2.80). It was therefore recommended that effective and

adequate entrepreneurship policies and programmers should be developed for farmers while

urgently addressing the negative factors that hinder its growth and development in the area.

Fostering entrepreneurship education at all levels to ensure capacity building for diverse

enterprises in agriculture was also advocated. Ultimately, government at all levels and private

sector support fund is necessary to enhance entrepreneurship spirit and development among

farmers in the area. Most importantly urgent measures should be taken to curb the destructive

activities of the Fulani cattle herdsmen so as to create a peaceful environment for agribusiness

investors in Taraba state, Nigeria.

27

Another study was on entrepreneurship development in agriculture among arable crop farmers in

Imo State, Nigeria was carried out by Esiobu Et al (2015). In this study, sixty household’s

entrepreneurs were selected using multi-stage random sampling techniques. Well-structured

questionnaire was the main tool for data collection. Data collected were analyzed using descriptive

statistical tools and 3-point likert scale rating of highly, moderately and low. Mean age was

42.11years. Majority (76.33%) were males. Greater proportions (71.67%) were married with an

average household size of 5.0 persons. Farmers cultivated on an average farm size of 1.61Ha.

Average annual farm income was N118, 392.00 ($789.28). Reasonable proportion of the farmers

identified personal intension, wanting autonomy and displacement/disruption in life as the key

drive to entrepreneurship development in the area. Entrepreneurship enterprises have been

invaluable to farmers in the area. However, farmers complained of poor access to entrepreneurship

information, inadequate start-up capital and long distance between farms and market in the area.

Despite this shortcomings farmers perceived their extent of entrepreneurship drive and

participation as been high (X=4.50). It was therefore recommended that effective and adequate

entrepreneurship policies and programmes should be developed for farmers while urgently

addressing the negative factors that hinder its growth and development in the area. Fostering

entrepreneurship education at all levels to ensure capacity building for diverse enterprises in

agriculture was also advocated. Ultimately, government at all levels and private's sector support

fund is necessary to enhance entrepreneurship spirit and development among farmers in the area

and beyond

Another study was carried out by Carter (1998) that investigated the business ownership activities

of 296 farm owners in Cambridgeshire. The results revealed extensive business ownership

activities, particularly among younger and better trained farm owners. It is argued that additional

business activities are best viewed as a continuum from the diversification of existing assets to the

ownership of a portfolio of businesses. Although farms are normally excluded from small business

analyses of rural entrepreneurship, the paper concluded that farmers are an important element of

the small business owning population. This is demonstrated not only in their ownership of farm

businesses, but also in their propensity to engage in farm-centered diversification activities, their

ability to start new non-farm enterprises and in their rental of farm land and buildings to external

businesses.

28

2.6 Conceptual Framework

Figure 2.1: Conceptual Framework

The figure above on the conceptual framework brings into view the interaction of the factors that

could influence the entrepreneurship skills of small scale farmers in Kanakantapa area. Education

and training as a variable includes the following indicators; level of education, technical training

and professional skills. Financial Literacy variable as an independent factor includes indicators

like maintenance financial records, the business’ cash flow, debt repayment and budgeting.

Market accessibility as an independent variable includes indicators such as road transport,

packaging and branding, distance to markets and availability of customers. These factors will be

assessed to determine how they influence the entrepreneurship skills of small scale farmers in

fisenge area. Influence of government support and NGOs together with the personal traits of the

entrepreneur on their business’ performance are considered intervening and moderating variables

respectively and will not be subjects of analysis in this study.

2.7 Conclusion

This chapter has reviewed literature relevant for the study. It specifically reviewed the theories

guiding the study including: Financial literacy, Market accessibility and Education and training

which all explain how entrepreneurship skills affect small scale farmers. The study further

reviewed empirical studies done both from international and local perspectives.

Financial literacy

Market accessibility

Education and training

Enhanced

Production Output

29

3.0 CHAPTER THREE: METHODOLOGY AND DESIGN

3.1 Introduction

This chapter presents research design which will be used in the research process as well as

providing the reasons why the selected methods will be used. The chapter contains the Research

30

Design, Source of Data, Sampling frame, Data Collection Techniques, Reliability and Validity of

Data, Data Analysis, Ethical consideration and Limitations of study.

3.2. Research design

Research design refers to the way a study is planned and conducted, the procedures and techniques

employed to answer the research problem or question (McMillan and Schumacher, 1984).

To guide the researcher in the collection, analysis and interpretation of observed facts, the

quantitative approach was adopted as a framework for the study. This was used as a guide in

collecting and analyzing of the data (Bless and Achola, 1988). The quantitative approach was

applied in terms of defining with precision, the relationship between the internal and external

factors. Quantitative techniques were used to determine the levels of impact (that is how much and

how often). This approach required gathering statistical data that would be used to test the variables

developed for this study. Cooper and Schindler (2011) indicate that quantitative data consists of

responses that are coded, categorized, and reduced to numbers so that these data may be

manipulated for statistical analysis.

3.3. Population of study

The study will be carried out in Kanakantapa Farming Area. Kanakantapa Farming Area is located

in Chongwe district in the region of the Lusaka province in Zambia. The area has got great

agriculture potential, the area mainly consists of small scale farmers whose main livelihood is

agriculture. In this case, the farmers in Kanakantapa are 500 out of a population of 6056 people

living in Kanakantapa. The village under investigations are H village, J village and K village).

3.4 Sample size

31

Owing to lack official statistics, a sample of 75 farmers will be randomly and purposively selected

from the villages in the resettlement scheme. Random sampling will be done using village

registers.

3.5 Sampling Design

A sample design is a definite plan for obtaining a sample from a given population (Kothari, 2004).

It refers to the technique or the procedure the researcher would adopt in selecting items for the

sample. Sample design may as well lay down the number of items to be included in the sample,

that is, the size of the sample. There are many sample designs from which a researcher can choose.

Some designs are relatively more precise and easier to apply than others. Researcher must

select/prepare a sample design, which should be reliable and appropriate for his research study

(Kothari, 2004). In this study, the researcher will use random sampling design.

3.6. Research Instruments

Research instruments are tools used for collecting data needed to find solutions to the issues under

investigation. The researcher will use face to face interactions with the respondents and a

questionnaire as the main research instrument. The questionnaires will be distributed by hand and

through electronic means. A questionnaire is a list of carefully structured questions chosen for

considerable testing with a view to elicit reliable responses from a chosen sample. Also, the

researcher decided to make use of questionnaires because they are simple, easy to administer and

allows for easy analysis. More so, the researcher can collect large volumes of data. Participants

can be free to give information as they remain anonymous. In addition, since the questionnaire

provides written information, there is less danger of misrepresentation of facts or information

(Kothari, 2004).

In addition, the researcher shall take both pre and post control measures for dealing with

disadvantages of using questionnaires. Pre-control measures shall include making sure that all

questions are concise and clear to avoid any misinterpretations. Most questions in the questionnaire

will be closed questions and participants will required to select alternative from a list of possible

answers. More so, participants shall be informed that the research is an academic exercise and that

names are not going to be divulged and this will help in ensuring that questions are answered

without any fear.

32

Thus, in this study, both primary and secondary data will be collected. Primary data will be

collected from small scale farmers using structured questionnaires. Secondary data will be

collected from various publications and authentic internet source

3.7 Validity and Reliability of Research Instruments

The tools designed should measure the variables actually intended to be measured in the study.

Validity in research is essential to see if the research tools are practically measuring the variables

that the research is focusing on. This is done to eliminate the measuring extraneous variables which

are part of the study. There are ways in which validity can be measured and these are content

validity and construct validity (Saunders et al, 2012).

The researcher shall utilise content and construct validity. Content validity focus on ascertaining

whether research instruments contain enough questions to cover the purpose of study. The

researcher shall ensure content validity by making sure that research questions and all the identified

gaps in literature review are well covered. The researcher will make sure that all questions are

concise and clear. In addition, there shall be use of closed questions that shall make it easier for

participants to complete questionnaires.

Reliability is defined as the extent to which a questionnaire, test, observation or any measurement

procedure produces the same results on repeated trials (Saunders et al, 2012). Reliability will be

enhanced through asking statistical questions (for example, the volume and monetary value of

transactions) and asking questions to various stakeholders (which will enhance the correctness of

data collected).

3.8 Response Rate

Sixty-seven (67) respondents replied out of the targeted 75, translating into the 89.33 percent

response rate. Eight (8) of respondents could not reply despite making several appointments. The

reasons for avoidance of interviews were not known. The reasons for non-respondents can be as

follows:

a) Pressure of work at the time the questionnaires were received; and

b) The use of online platforms due to covid 19 pandemic as some respondents lacked

information technology skills

33

However, this response is supported by Easterby-Smith et al. (2006) who stated that the expected

industry norm is of the order 25 to 30 percent if appropriate measures for increasing responses

are undertaken.

3.9 Data Analysis

Data analysis is a pivotal part of the research process to arrive at findings in Quantitative analysis

using the Statistical Package for Social Sciences (SPSS) version 20. SPSS is a software package

used in data analysis and is a menu-driven system that allows for in-depth data access and

preparation, analytical reporting and modelling (Saunders et al, 2012). Qualitative data analysis

will be conducted using content analysis. Ritchie and Lewis (2003) argue that qualitative content

analysis involves a process designed to condense raw data into categories or themes based on valid

inference and interpretation. Therefore, the field data will be analysed using SPSS to produce

descriptive statistics and the output will be organized using excel.

3.10 Ethical Considerations

Ethics define the right and wrong conduct in research. According to Saunders et al (2012), ethics

of research include informed consent, confidentiality, protection of privacy, protection against

harm, and protection against identity. Ethical considerations are observed when participants are

informed about the study and consent is sought. Participants will be told not to write their names

on questionnaires and this will ensure anonymity. In addition, participants will be informed that

data collected is to be used for academic purposes only and that the information collected shall to

be treated with confidentiality.

34

4.0 CHAPTER FOUR- DATA PRESENTATION AND ANALYSIS

4.0 Introduction

In the previous chapter, the research methodologies used in this study were described. Research

design and strategies to achieve the main aim and objectives of this study were also discussed.

Research strategies reviewed included; exploratory, descriptive and explanatory studies. The

survey was identified as the most suitable method to achieve the research objectives in this study.

Questionnaire survey using online and non-online platforms were the research instruments used in

the data collection.

4.1 Demographics Data Analysis

Table 4.1: Demographics summary Statistics

Statistics

Gender Age Full/Part Time Period Active Farm Size

Total 67 67 67 67 67

Mean 1.5522 3.0597 1.4179 2.4925 1.7761

Std. Deviation 0.50102 0.75640 0.49694 0.74616 0.67016

Minimum 1.00 2.00 1.00 1.00 1.00

Maximum 2.00 4.00 2.00 4.00 3.00

Source: Survey Data (2020)

Table 4.1 shows the respondents profile comprised of Gender with mean 1.5522 and standard

deviation 0.50102.Respondents Age having the mean 3.0597 and standard deviations of 0.75640.

Full/Part Time farmer category comprising of mean 1.4179 and standard deviations of 0.49694.

Further, Period Active and Farm Size having the mean of 2.4925 and 1.7761 respectively. Standard

deviation of 0.74616 and 0.67016 respectively.

35

4.1.1 Gender

Table 4.2. Respondents Gender frequency distribution

Gender

Frequency Percent Valid Percent Cumulative Percent

Male 30 44.8 44.8 44.8

Female 37 55.2 55.2 100.0

Total 67 100.0 100.0


Figure 4.1 shows that from the respondents thirty (30) were male, and thirty-seven (37) were

females. The gender distribution shows that forty-four point eight (44.8%) were male and fifty-

five point two percent were female (55.2%).

36

Figure 4.1. Respondents Gender Histogram


37

4.1.2 Age

Table 4.3. Respondents Age frequency distribution

Age


25-32yrs 17 25.4 25.4 25.4

32-40 yrs 29 43.3 43.3 68.7

Above

40yrs 21 31.3 31.3 100.0

Total 67 100.0 100.0


Table 4.3 indicates the age of the respondents. Majority of the respondents were between the age

of 32 and 40 years, making a percentage of forty-three point three (43.3%).Respondents aged

above 40 years also made thirty-one point three percent (31.3%) of the sample. The respondents

aged between 25 and 32 was twenty-five point four percent (25.4%) of the sample.

38

Figure 4.2. Respondents Age frequency distribution


39

Figure 4.3. Respondents Age Pie Chart


40

4.1.3 Farm Size

Table 4.4. Respondents Farm Size frequency distribution

Farm Size

Frequency Percent

Valid

Percent

Cumulative

Percent

Small 24 35.8 35.8 35.8

Medium 34 50.7 50.7 86.6

Large 9 13.4 13.4 100.0

Total 67 100.0 100.0


The frequency distribution table above shows the Farm Size of respondents who participated. The

Medium Farm Size had the most respondents at fifty point seven percent (50.7%). The Small farm

size had thirty-five point eight percent (35.8%) of respondents and large category held thirty point

four percent (13.4%) of respondents.

4.1.4 Full Time or Part Time Farmer

Table 4.5. Respondents Full Time or Part Time Farmer Histogram

Full or Part Time

Frequency Percent

Valid

Percent

Cumulative

Percent

Yes 39 58.2 58.2 58.2

No 28 41.8 41.8 100.0

Total 67 100.0 100.0


41

Table 4.5. Shows the Full Time or Part Time Farmer of the respondents, majority of the

respondents were Full Time farmers, they made up a percentage of fifty-eight percent point two

(58.2%). Part Time Farmer held the percentage of forty-one point eight (41.8%).

Figure 4.4. Respondents Full Time or Part Time Farmer Histogram


42

4.1.5 Demographic Data Correlation Analysis

Table 4. 6: Pearson Correlation Analysis

Gender Age Full/ Part-time Period Active Farm Size

Gender 1 -0.288* 0.154 -0.131 -0.032

Age -0.288* 1 -0.148 -0.053 0.057

Full/ Part-time 0.154 -0.148 1 -0.073 0.012

Period Active -0.131 -0.053 -0.073 1 0.012

Farm Size -0.032 0.057 0.012 0.012 1


From Table 4.6. The Gender and Age had a negative correlation with a co-efficient of -0.288.

There was a positive relationship between the Farm Size and the Period Active as indicated by a

co-efficient of 0.012. The Farm Size had a positive correlation with the Respondents Age n with a

co-efficient of 0.057. Full/ Part-time had a weak positive co-relation with Gender as shown by the

0.154 correlation co-efficient.

4.2 Factors that hinders development of entrepreneurship skills among small scale farmers

Table 4.7: Education, Training and Entrepreneurship Skills Descriptive Statistics

43

Variables

Total

Min

Score

Max

Score

Mean

Score

Std.

Dev

EL: The highest level of education you have attained 67 1.00 5.00 2.0000 0.9374

TECHSUP: Technical support or training on business

management and farming as a business from the

extension staff

67 1.00 2.00 1.3284 0.4731

BUSMGT: Apply any business management tools

learnt in managing your agricultural enterprise 67 1.00 2.00 1.4925 0.5037

AGRBOINF: Do Agribusiness officers and other

extension staff provide information 67 1.00 4.00 2.4030 0.7988

FARMT: Training on farming skills 67 1.00 2.00 1.3284 0.4736

FRMSKIL: Farmers have skills more than others 67 1.00 2.00 1.4925 0.5037


The mean score for (EL: The highest level of education you have attained) was 2.00, (TECHSUP:

Technical support or training on business management and farming as a business from the

extension staff) was 1.3284, (BUSMGT: Apply any business management tools learnt in

managing your agricultural enterprise) was 1.4925, ( AGRBOINF: Do Agribusiness officers and

other extension staff provide information) was 2.4030, (FARMT: Training on farming skills) was

1.3284 and (FRMSKIL: Farmers have skills more than others) was1.4925.

Table 4.8: Financial Literacy Descriptive Statistics

44

Total

Min

Score

Max

Score

Mean

Score

Std.

Dev

FLFR: Maintain any farm/business financial

records 67 1.00 2.00 1.6716 .47316

FLCFAGR: Level of satisfaction in terms of

cash flow from your agricultural enterprise 67 1.00 4.00 2.5821 .65480

FLDEBT: Repay all your debts in time or you

have been facing serious difficulties in meeting

your financial obligations

67 1.00 2.00 1.6269 .48729

FLBUDG: Prepare partial or complete farm

budgets to assist you maintain your expenditure

within the planned levels

67 1.00 2.00 1.2537 .43843

FLGROSMGA: Enterprise specific plans or

gross margin analysis to help you operate the

most economically viable enterprise with

relative advantages

67 1.00 2.00 1.7761 .41999

FLEXPEARN: Expected earnings under ideal

conditions 67 1.00 4.00 1.9851 .70695


Table 4.8, in the second row, it can be observed that the minimum score among the variables was

1 whereas the maximum was 4(Mean= 2.5821, Standard deviation= 0.65480) and in the sixth row,

it can be observed that the minimum score among the variables was 1 whereas the maximum was

4(Mean= 1.9851, Standard deviation= 0.70695). However, the other rows had the minimum score

among the variables was 1 whereas the maximum was 2.These scores indicate that the respondents

used the entire survey scale, implying adequate variability amongst the response.4.3 Factors

affecting entrepreneurship skills

45

Table 4.9: Education, Training and Entrepreneurship Skills Frequency Distributions

EL: The highest level of education you have attained


Valid 1 23 34.3 34.3 34.3

2 26 38.8 38.8 73.1

3 14 20.9 20.9 94.0

4 3 4.5 4.5 98.5

5 1 1.5 1.5 100.0

Total 67 100.0 100.0

(1= None, 2= Primary, 3= Secondary, 4= Diploma, 5=Degree)

TECHSUP: Technical support or training on business management and farming as a

business from the extension staff


Valid 1 45 67.2 67.2 67.2

2 22 32.8 32.8 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

BUSMGT: Apply any business management tools learnt in managing your agricultural

enterprise


Valid 1 34 50.7 50.7 50.7

2 33 49.3 49.3 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

AGRBOINF: Do Agribusiness officers and other extension staff provide information


Valid 1 8 11.9 11.9 11.9

2 29 43.3 43.3 55.2

3 25 37.3 37.3 92.5

4 5 7.5 7.5 100.0

Total 67 100.0 100.0

1=Record keeping, 2= Marketing, 3=Capital sourcing, 4=Farm business planning

46

FARMT: Training on farming skills


Valid 1 45 67.2 67.2 67.2

2 22 32.8 32.8 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

FRMSKIL: Farmers have skills more than others

(1= Yes, 2= No)


Valid 1 34 50.7 50.7 50.7

2 33 49.3 49.3 100.0

Total 67 100.0 100.0


Table 4. 9 represents Education, Training and Entrepreneurship Skills of the respondents. The

respondents revealed, their level of agreement or disagreement to the situations.

The highest level of education you have attained had 34.3% of the respondents indicated that they

none in terms of level of education. 38.8% Primary level of education, while 20.9% Secondary

level. 4.5% Diploma, and 1.5% had Degree level of education. TECHSUP: Technical support or

training on business management and farming as a business from the extension staff revealed

67.2% of respondents agreed that they receive technical support or training on business

management and farming as a business from the extension staff and 32.8% disagreed.

BUSMGT: Apply any business management tools learnt in managing your agricultural enterprise

shows 50.7% of respondents agreed that they apply business management tools learnt in managing

agricultural enterprise, while 49.3% of respondents disagreed. AGRBOINF: Do Agribusiness

officers and other extension staff provide information represent 11.9% of respondents are provided

by extension staff information on Record keeping, while 43.3%) of the respondents are provided

with Marketing information. 37.3%) of the respondents are provided with Capital sourcing

information, while 7.5% of respondents are provided with Farm business planning information.

47

FARMT: Training on farming skills had 67.2% of the respondents strongly agreed that they have

received training on farming skills. 32.8% of respondents disagreed. FRMSKIL: Farmers have

skills more than others represented 50.7%) of respondents strongly agreed, whilst 49.3% disagreed

on the matter.

48

Table 4.10: Financial Literacy Frequency Distributions

FLFR: Maintain any farm/business financial records


Valid 1 22 32.8 32.8 32.8

2 45 67.2 67.2 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

FLCFAGR: Level of satisfaction in terms of cash flow from your agricultural enterprise


Valid 1 1 1.5 1.5 1.5

2 31 46.3 46.3 47.8

3 30 44.8 44.8 92.5

4 5 7.5 7.5 100.0

Total 67 100.0 100.0

((1= Very satisfied, 2= Satisfied, 3= Dissatisfied, 4=Very dissatisfied)

FLDEBT: Repay all your debts in time or you have been facing serious difficulties in meeting

your financial obligations


Valid 1 25 37.3 37.3 37.3

2 42 62.7 62.7 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

FLBUDG: Prepare partial or complete farm budgets to assist you maintain your expenditure

within the planned levels


Valid 1 50 74.6 74.6 74.6

2 17 25.4 25.4 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

FLGROSMGA: Enterprise specific plans or gross margin analysis to help you operate the most

economically


49

Valid 1 15 22.4 22.4 22.4

2 52 77.6 77.6 100.0

Total 67 100.0 100.0

(1= Yes, 2= No)

FLEXPEARN: Expected earnings under ideal conditions

(1= Less than K5,000, 2= K6000-K10,000 , 3= K 11,000-K15,000, 4= More than K20,000 )


Valid 1 13 19.4 19.4 19.4

2 46 68.7 68.7 88.1

3 4 6.0 6.0 94.0

4 4 6.0 6.0 100.0

Total 67 100.0 100.0


From Table 4.10, FLFR: Maintain any farm/business financial records revealed 32.8% of

respondents agreed that they maintain any farm/business financial records, while 67.2% disagreed

on the matter. FLCFAGR: Level of satisfaction in terms of cash flow from your agricultural

enterprise had 1.5% of respondents very satisfied, while 46.3% of the respondents satisfied. 44.8%

of respondents dissatisfied, whilst 7.5% very dissatisfied on the matter.

FLDEBT: Repay all your debts in time or you have been facing serious difficulties in meeting

your financial obligations had 37.3% of respondents strongly agreed. 62.7% of respondents

disagreed. 74.6% of respondents agreed that they prepare partial or complete farm budgets to assist

maintain expenditure within the planned levels and 25.4% disagreed. FLGROSMGA: Enterprise

specific plans or gross margin analysis to help you operate the most economically showed 22.4%

of respondents strongly agreed. 77.6% of respondents disagreed on this matter. FLEXPEARN:

Expected earnings under ideal conditions revealed 19.4% of the respondents had Less than K5,

000 expected earnings, whilst 68.7% had expected earnings between K6, 000 and K10, 000. 6.0%

of the respondents had between K 11,000 and K15, 000 and 6.0% had expected earing of More

than K20, 000.

50

5.0 CHAPTER FIVE: INTERPRETATION & DISCUSSION OF FINDINGS

5.1 Introduction

The Objective of this study was to find out to identify the factors that hinders development of

entrepreneurship skills among small scale farmers, examine the extent to which the factors

affecting entrepreneurship skills have contributed to the stagnation of small scale farmers in

Kanakantapa Farming Area of Zambia and to establish the effectiveness of the measures taken to

develop entrepreneurship skills among small scale farmers. The study was carried out in

Kanakantapa Farming Area. Sample of sixty-seven (67) small scale farmers were selected to

answer the questionnaire provided. This chapter discusses the findings, based on the data collected.

5.2 Factors That Hinders Development of Entrepreneurship Skills among Small Scale

Farmers

This research study touched on various factors affecting entrepreneurship skills of small scale

farmers. The study looked at the Demographics characteristics of respondents, and education,

training and entrepreneurship skills and financial literacy.

This is a preliminary stage of data processing that creates a summary of collected data to yield

useful information and prepare the data for further analysis. In this study it was used to measure

central tendency and dispersion.

The current study was undertaken among small scale farmers kanakantapa. The gender distribution

showed the majority of female compared to male. Female entrepreneurs tend to mainly concentrate

on micro-businesses due to gender inequalities in income distribution. The research findings may

probably be explained by the fact that Zambia like most African countries is a matriarchal society

where women dominate in most spheres of life and especially so in farming matters. The research

sought to establish the duration of time that the small scale farmer have been in operation since

inception, young businesses face serious challenges that make the owners consider their businesses

as doing poorly within the first year of startup. This finding is clearly supported by the literature

reviewed at the beginning of the study. It also shows that most micro and small businesses hit their

peak at the fifth year. After the fifth year, most entrepreneurs seem to suffer from what may be

described as entrepreneurial burnout and the excitement declines. This may partly explain why

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most businesses that are more than 5 years and above consider their businesses as being in the

process of failing. This finding seems to confirm the observation made by Longenecker et al.,

(2006) that entrepreneurial burnout may lead to entrepreneurs losing interest in one business

venture and instead look out for other opportunities.

5.3 Extent to which the factors affecting entrepreneurship skills have contributed to the

stagnation of small scale farmers

In relation to respondents’ financial literacy the research focused on the ability of the agribusiness

community to maintain income and expenditure records, business cash flow

adequacy, budgeting and ability to repay debts when borrowed. In terms of records

maintained a good proportion (67.2%) of the respondents, do not keep any forms of records

especially amongst the farmers; however most of the other off farm businesses maintain

incomplete records which averaged (32.8%), this can be utilized to construct complete

records. The Records come in handy when carrying out farm budgeting and planning and

they are also important since they guide business operators keep track of costs and

income and eventually profit determination.

The study findings also indicate that cash flows resulting from the agricultural enterprises

operations are either insufficient or poorly recorded. Up to 52.3 % of the respondents are

not satisfied with the cash flows from their enterprises. The finances are seasonal with

some periods having enough cash while at times liquid cash is totally lacking, this leads

to inability to meet their day to day financial obligations. These findings are in agreement with

Hardwork (1997) who explains that the basic economic problem is that of allocating

scarce resources among competing ones.

The results obtained also signify that agricultural business operators are also unable to

repay debts incurred during the production or procurement period and attribute this to

insufficiency in cash flow. The study revealed that 62.7% out of 100% incurred short

term debts of which many were not able to pay back due to various reasons. Some of

these reasons include lack of a ready market for their commodities, poor prices and high

input costs and they can therefore not breakeven to allow them recoup production costs.

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In terms of budgeting many agribusiness operators carried some form of budgeting

whether in the prescribed format or in some informal way, the respondents not budgeting

also indicated that their purchases were based on need to need case (impulse) otherwise

nearly half of them budgeted. This is in line with the findings of Kapoor (2011) whose

findings revealed that planned spending through budgeting is the key to achieving

organizational goals and future financial security. In his research he explained that most

projects fail within the first few years of formation, due to financial difficulties caused by

poor financial management.

The study findings show positive relationship between financial literacy as interrogated

by the above discussed indicators on business performance. We may therefore infer that

not only do businesses need to have adequate access to finance but they also need the

financial literacy to be able to optimally utilize whatever resources at their disposal.

Existing policy interventions should be geared towards successful linkages and support

services to farmers and other agricultural businesses such as training on investment and

financial management to empower the recipients make prudent use of the credit

advanced. Effective financial management would help expand their businesses and

diversify to related ventures aimed at improving their ability to generate a constant flow

of income, to fulfill repayment schedules as spelt out by financiers.

5.4 Effectiveness of the Measures Taken To Develop Entrepreneurship Skills among Small

Scale Farmers

Overall small and micro agricultural enterprises incur higher operational costs. The firms

suffer from diseconomies of scale, the small scale farmers have been experiencing difficulties in

accessing lucrative markets for their products Market accessibility can be influenced by

the size of the firm, micro and small enterprises may not be able to access far off markets,

on the other hand larger companies enjoy the advantages of economies of scale and can

therefore be able to access far off markets. Given the importance of enterprise age and

size in access to credit, short life expectancy of small scale farmers, especially informal ones, is

an impediment to market access. As part the study findings, the growth rate and expansion

of agricultural entrepreneurs is directly influenced by the size of the firm, data obtained show

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that a majority of the respondents (80%) are experiencing a slow growth rate which they

directly attribute to their micro or small scale of operation.

Managerial competencies are sets of knowledge, skills, behaviors and attitudes that

contribute to personal effectiveness (Hellriegel et al, 2008). Managerial competencies are

very important to the survival and growth of agricultural entrepreneurs. Martin and Staines

(2008) found that lack of managerial experience and skills are the main reasons why new

firms fail before their fifth birthday. The research sought to interrogate the academic

qualifications, trainings attended and the technical services received by the agribusiness

operators consulted as indicators of their managerial competencies. It was ascertained

that all the agricultural enterprise operators interviewed had some formal education

acquired either from formal academic institutions or from other trainings conducted by

government agencies and other development partners. The skills gained assist the

respondents in making crucial decisions relating to their business operations based on

available information, this in the long run has a significant influence on the agribusiness’

performance.

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6.0 CHAPTER SIX- CONCLUSIONS AND RECOMMENDATIONS

6.1 Introduction

This chapter outlines the conclusions and recommendations of the study. The study evaluated

factors affecting entrepreneurship skills of small scale farmers in kanakantapa farming area. The

study utilized percentage tables and correlation models in trying to analyze the data obtained.

6.2 Conclusions

The research findings on the small scale farmers’ demographic characteristics data reveal a bias in

gender distribution on the part of the respondents. The study therefore concluded that most

agricultural entrepreneurs in kanakantapa are females and therefore agricultural based economic

activities are dominated by female gender especially on agribusinesses dealing in trade, brokerage

and transportation of agricultural produce. In this regard there is need to put in place strategies that

would encourage more males to participate effectively in non-farm based activities. Study findings

in terms of the ages of the respondents concluded that most of the youth do not participate in

agricultural enterprises while the aging population who have opted out of other professions

(retirees) are actively engaged in agriculture as an economic activity either directly or indirectly.

There should be interventions to attract the young and energetic population to these ventures to

guarantee its growth and secure its future.

The findings also concluded that the level of education and training on agricultural best practices

and business management has a direct and positive relationship with the performance of the

agricultural enterprises studied which was analysed in terms of earnings realized per season. The

participants with basic education i.e. primary and secondary level qualifications are the majority

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of the participants involved in agricultural based economic activities. Owing to the fact that this

group of respondents possess no additional skills or training, efforts should be put in place to

facilitate their more active participation because they have no alternative jobs, these are their

primary occupations. It also concluded that irrespective of the level of education all agribusiness

entrepreneurs require specialized training to equip them with skills on current technologies and

bring them up to date on production and market trends. The findings also revealed low levels of

interactions with the agribusiness officers on the ground implementing government projects to

transform agriculture from subsistence focus to commercial ventures while providing demand

driven trainings. The regulatory environment directly impacts on the performance of agricultural

entrepreneurs as it stipulates trading rules, taxes and licences which are direct costs that work to

reduce the incomes realizable by the enterprises.

6.3 Recommendations

Agricultural entrepreneurs should be able to produce business plans that forecast cash flow

requirements, have an operational plan and demonstrate viability and sustainability in order

to secure and effectively manage finance.

Provide up-to-date training programmes that focus on the needs of entrepreneurs rather

than outdated programmes. It is important to include technology in the school curricula as

well as adult education programmes to ensure that the wider population becomes more

familiar with technology. Tax incentives need to be put in place to favour new venture

creation and development. Interest rates reviews should consider the uniqueness of

agricultural entrepreneurs.

Further studies on how to increase the number of youths participating in agricultural

activities ought to be undertaken, while measures to improve record keeping for farm based

enterprises need further examination to devise simple templates on record management.

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